Breaking Fraud Cases from the Ontario Courts
On May 16, 2017, the Ontario Superior Court of Justice released its Reasons for Sentence in the case of R. v. Fontana, 2017 ONSC 2964. The Court issued a conditional sentence (house arrest) of two years less a day, plus a restitution order of $150,000 and three years probation.
The Court also imposed a jail-in-lieu-of-forfeiture order granting the Crown to seek a jail sentence of two to three years if Ms. Fontana did not sell her marital home within the two years of house arrest.
The story of Ms. Fontanca’s conviction were reported by the Courts on January 16, 2017, at R. v. Fontana, 2016 ONSC 7076. The Court found as fact that Ms. Fontana had borrowed $150,000 for the purposes of opening a restaurant, signed a promissory note indicating that she would repay then $150,000 within five years, and that Ms. Fontana ended up using the money to fund her gambling habit, for her personal expenses and for a BMW.
The Court held that the acts of Ms. Fontana constituted fraud by “other fraudulent means”, meaning that “ordinary decent people” would consider the conduct of Ms. Fontana “dishonest” and “at variance with straightforward or honourable dealings.”
The Court held that Ms. Fontana that although she may have had good intentions to use the money for the purpose represented, her conduct became dishonest when she started to use the money for gambling without telling her friend that she borrowed from.
Norman Groot, a fraud recovery lawyer in Toronto with Investigation Counsel PC, noted that, “this is an important decision as often promissory notes do not contain express terms of what the money that is borrowed can be used for.”
Groot also noted that “’the use of jail-in-lieu-of-forfeiture’ is also a positive development in the criminal law. But for this ruling, the victim in this case would have little hope of a recovery. That said, criminal complaints should usually be coordinated with civil recovery.”
The Court noted that just before obtaining the $150,000 from her friend, Ms. Fontana had transferred title of their matrimonial home to her husband. The Court suggested that Ms. Fontana have her husband agree to mortgage or sell their home to pay the victim, or she risked going to jail if the Crown applied for it.
To review the Reasons for Conviction, see: CanLII
To review the Reasons for Sentence, see: CanLII